Is this trend a good trading opportunity?
Will ASOS turn, or will it close the gap to 4000p? (+10%)
- Shares in an uptrend since December
- Shares -59.9% from 2018 highs; +46.5% from 2018 lows; +36.7% year-to-date.
- 12th April: Despite an 87% plunge in profits, the retailer “increased confidence” that its performance would improve in the second half of the year.
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading ASOS – An Example
Let’s say the trend appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of ASOS using a CFD, at the current price of 3645p. To do this, you need £2,000.
Let’s assume ASOS trend continues to 4000p? (+10%). Your profit would be £1000, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. ASOS falls 5% and hits your stop-loss. Your loss would be £500.
This is provided for information purposes only. It should not be taken as a recommendation.